headerads

By clicking submit, you agree to the Disclaimer and consent to receive emails from us. ?php>

Monday, October 22, 2012

Google Inc (NASDAQ:GOOG): Too Soon to Write off At This Juncture

Google Inc(NASDAQ:GOOG)
did report dismal results for the third quarter in 2012 and the figures did
show that its core advertising business is slowing down.

But it is too soon for doomsday prediction as many in
the analyst fraternity seem to be doing.

Questions are already being raised about the Internet
search giant's future ability to get profits from search and mobile devices. It
is a tough market as a mobile device is seen as peculiarly personal and
customers may be less inclined to click on ads compared to a traditional
computing device.

However it is not an impossible market to conquer. It
is a challenge for sure and there are numerous claimants to get a slice of the
mobile ads market. Google, Facebook, Microsoft are all in the race to translate
their user base on mobile into paying customers.

Chief executive and co-founder Larry Page insisted, in
a conference call, after the results were erroneously released, that the
company was in a good position to capitalise on its mobile business.

Even though the company had earned less on mobile ads
than what it did on desktops, still the company's revenues from mobile ads was
$8 billion a year, he said.

Incidentally, its cost-per-click, a vital parameter
that measures profitability, dropped 15 percent during the quarter, the fourth
consecutive quarter that it has seen a decline.

However a single quarter cannot negate Google's sound
business model. These are unusual times and a global slowdown is bound to have
some effect.

There are analysts who swear by the long-term
prospects of the stock and are thinking of accumulating more of its shares to
leave to their children.